Bitmain Pauses Employee Salaries
Bitmain, a prominent manufacturer specializing in application-specific integrated circuits (ASICs) for Bitcoin, has reportedly halted salary payments for its employees starting from September, according to a recent report by Leiphone, a technology information service platform based in China.
Several Bitmain employees, who preferred to remain anonymous, have revealed that the company has also eliminated all “bonuses and incentives” for its staff. The report outlines how Bitmain has not issued payments owed to its employees since the previous month, adding to the financial burden faced by its workforce. Additionally, employees are now contending with a 50% reduction in their base salaries.
A communication purportedly shared by Bitmain’s management conveyed:
"For the month of September, the company has yet to achieve a net positive cash flow, especially in the orders of [new] ASICs. The Executive Management Team therefore decided that salaries for the month of September will be paused, to be reviewed after October 7 after [the] holiday. [sic]"
Established in Beijing, China, in 2013, Bitmain once held a dominant position as one of the world’s leading manufacturers of Bitcoin (BTC) mining ASICs, boasting an estimated 70% market share during its peak. The company’s Antminer ASIC series consistently led the industry in hash rate computations for Bitcoin mining.
Recently, Hive, a former Bitcoin mining firm, announced its acquisition of 2,000 Bitmain S19 XP ASIC miners for immediate deployment in its mining operations. Hive has since shifted its focus to AI and Web3 from its previous emphasis on mining.
The S19XP ASIC miners are currently available on Bitmain’s website for $4,653 each. Hive anticipates that with the integration of these miners, its mining rigs will generate a combined revenue of $80 per megawatt-hour, factoring in both the newly acquired Bitmain models and older hardware.
In 2021, Bitmain’s co-founder, Jihan Wu, resolved a year-long ownership dispute with fellow co-founder Micree Zhan. The agreement stipulated that Wu would step down from his roles as chairman and CEO of Bitmain and sell his ownership stake to Zhan for $600 million.
At that time, Bitmain had ambitious plans for an initial public offering, aiming for a valuation of $5 billion by late 2022. However, these plans seem to have been shelved due to the ongoing bearish market conditions.
Bitmain’s recent financial challenges coincide with similar difficulties faced by other companies in the cryptocurrency industry. Prominent crypto firms Ledger and Chainalysis, specializing in blockchain hardware and blockchain security/analytics, respectively, have recently announced staff layoffs, citing shifting market dynamics and the need to adapt to changing industry conditions.